China Advances Film Industry Law, Cracks Down on "Western Values"

Topics addressed in the draft of China's film industry rulebook include market access for foreign movies, censorship and how to handle artists "tainted" by drug and prostitution scandals.

China's top legislature on Monday reviewed a draft of the country's long-awaited first film law. Once passed, the new legal framework will have wide-ranging implications for China's domestic film industry and the Hollywood studios that do business in the country.

China's box office is expected to surpass North America's within the next three years. This week's review process at the National People's Congress Standing Committee, which runs from Monday to Saturday, provides a sneak peek of the new rulebook likely to govern the world's soon-to-be-largest movie market. The topics addressed range from censorship policy to market access for foreign films to how to handle artists "tainted" by drug and prostitution scandals.

Among the proposed guidelines made public Monday by state-run news agency Xinhua was a rule requiring distributors to ensure that local Chinese films make up at least two-thirds of total run time on Chinese screens. China already limits revenue-sharing foreign film imports to just 34 titles per year under a trade agreement with the U.S. That deal is set to expire at the end of this year, and the additional limit would seem to ensure that Chinese movies dominate market share regardless of whether the quota is lifted, relaxed or renewed. In recent years, it's been understood that China's regulators have aimed to secure at least 55 percent of local box office for Chinese films.

The draft law also includes provisions designed to crack down on box-office fraud, stating that "film distribution companies and cinemas should not fabricate movie ticket sales or engage in improper methods," according to Xinhua. In 2015 and 2016, several local production companies and distributors were caught gaming China's box office by mass-buying tickets to their own movies. The tactic was used to create the impression of a hit for marketing gain, or to manipulate China's hot financial markets. Under the new law, companies engaged in such practices could be fined up to 500,000 yuan ($75,000), hit with business suspensions or outright banned, Xinhua said.

Much of the language surrounding the draft law concerns the "moral integrity" of those engaged in the film industry and what the Chinese Communist Party calls "core socialist values." Throughout his four-year tenure, Chinese president Xi Jinping has pushed an unprecedented campaign to limit the influence of "Western lifestyles" in China and to censor media that do not reflect the official Communist Party line. The discussion surrounding the new film law reflects these imperatives.

According to the new draft, film industry workers should "strive for excellence in both professional skills and moral integrity" and build a positive public image. China's media regulator, the State Administration for Press, Publishing, Radio, Film and Television, announced Friday that it is "establishing a professional ethics committee to guide organizations and people in the media to practice core socialist values."

Several high-profile Chinese film stars have been arrested on drug or prostitution-related charges in recent years. The film law reiterates a ban on screenings featuring anyone who has been caught engaged in criminal activity in China, and it says such "tainted artists" will be ineligible for industry awards.

On Monday, SAPPRFT issued a parallel set of guidelines instituting further crackdowns on Chinese news media and entertainment. Content must be dominated by mainstream ideologies and "positive energy," the regulator said, adding that local content should not "express overt admiration for Western lifestyles." Also out of bounds are "Improper jokes" and "defiling the classics."

"They should also avoid putting stars, billionaires or internet celebrities on pedestals," and not advocate overnight fame or sensationalize family disputes, Xinhua added in a report on the media crackdown.

Chinese film industry professionals have long called for regulators to introduce a movie ratings system like the one used in North America and other countries. Currently, China's censors review films on an up-down basis, approving or banning movies for consumption by viewers of all ages. The system means that R-rated movies from the U.S. usually can't be released in China, or must undergo heavy cuts.

The new draft law says that films containing material that "might cause psychological or physical discomfort" to viewers, including minors, should carry warnings of some kind. The proposal appears to stop short of a full ratings system, however.

The draft also states that Chinese citizens, corporations and other organizations can provide film processing and postproduction services for overseas movies provided that those projects don't contain content "harmful to national dignity and the interests of China, cause social instability or hurt the national feeling."

The legislature's reading of the film law on Monday marked its second official review. The first reading took place in October. The National People’s Congress has indicated that it intends to pass the bill before the end of 2016.